Sex, drugs, and dirty movies: CleanFlicks sues doppelganger

When the media began reporting that a CleanFlicks cofounder had been busted …

Police in Utah recently busted 31-year old Daniel Thompson for paying 14-year-old girls $20 each for oral sex. At Thompson's business, cops found a cache of pornographic films "along with a keg of beer, painkillers and two cameras hooked up to a television." Such stories are typical enough not to arouse much in the way of commentary, but this one had the sweet stink of hypocrisy about it: Thompson's business was selling "clean" versions of films with the naughty bits trimmed away.

This sounds more than a bit like the controversial CleanFlicks company from a few years back, and that's no coincidence. Thompson had in fact been passing himself off as the operator of CleanFlicks, though in reality, he had little to do with the company. When news of his arrest broke, papers and blogs began reporting a link between Thompson and CleanFlicks, with some even claiming that he was the company's founder.

The problem: CleanFlicks is still in business after its drubbing at the hands of Hollywood, and it now sells unedited versions of family-friendly films. Given the terrifically bad press surrounding the Thompson case, CleanFlicks went on a PR campaign to clear its name and also filed a federal lawsuit against Thompson.

When CleanFlicks sold off its bricks-and-mortar stores several years ago, Thompson's father bought a couple and gave them to his son to run... when Thompson got out of jail for securities fraud. In retrospect, this wasn't a great idea, but you've got to feel for the father who tried to help his son go straight, only to be rewarded with lurid stories of booze and porn.

Daniel Thompson was made the manager of two stores, which he continued to operate under the "CleanFlicks" name. CleanFlix, which had stopped offering its edited movies after losing a federal court battle in 2006, told Thompson to stop using its name. Thompson renamed his stores to "Flix Club" and continued to edit films.

In the wake of Thompson's bust, CleanFlicks has filed a federal lawsuit (a copy of which was seen by Ars Technica) that seeks, among other things, $100,000 under the Cyberpiracy Prevention Act. It also wants at least $1 million for the willful use of the company's trademark.

CleanFlicks even launched a web site to clear up the confusion and asked all "journalists, bloggers, and media outlets" to correct any inaccurate information that has already been published. The company's response has been strident, but that's to be expected; CleanFlicks announced its new business model in January, only to find its launch undermined by horrible PR a few weeks later.

One copyright-related sidenote to this case: Thompson had continued to edit films at Flix Club because he claimed that an "educational exemption" in copyright law made the practice legal if he sold to schools and universities. While copyright law does contain some special film-related provisions for educational settings, FlixClub's practices seem unlikely to have passed muster in court.

The whole scheme unraveled after the mother of one of the 14-year-old girls asked her daughter where a new $20 bill had come from. The answer ("Servicing some guy in the back of his booze-and pills-filled storefront, Mom") landed Thompson in trouble with both the police and with CleanFlicks. While prosecutors might toss him in jail, CleanFlicks looks to bankrupt him.

Is there any hypocrisy in a company like CleanFlicks once trampling on the copyright of filmmakers and now using the legal system to enforce its own intellectual property rights? We report, you decide.